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Target Corporation
Type Public (NYSE: TGT)
Founded 1902 (Minneapolis, MN)
Headquarters Minneapolis, Minnesota, USA
Key people Bob Ulrich, chairman and
chief executive officer
Industry Retail
Products Clothing, footwear, bedding, home decor, housewares, furniture,
lawn and garden, jewelry, beauty products, electronics, sporting goods, and
pet products.
Revenue $59.490 billion USD (2006)[2]
Net income $2.787 billion USD (2006)[2]
Employees 352,000[1]
Website www.target.com (Online store)
www.targetcorp.com (Corporate)
Target Corporation (NYSE: TGT), originally known as the Dayton Dry Goods
Co., is a retailing company that was founded in Minneapolis, Minnesota, in
1902. In 1962, the first Target store was opened in Roseville, Minnesota. It
is the sixth-largest retailer (by sales revenue) in the United States behind
Wal-Mart, The Home Depot, Kroger, Sears Holdings Corporation and Costco,[3]
and is ranked 30th on the 2006 Fortune 500. It sells more gift cards than
any other U.S. retailer and is the fifth-largest U.S. seller of music.[4]
Target operates its retailing business exclusively in the United States.
Target was listed in the Top 500 largest e-retailers Guide by Internet
Retailer in 2007. This list also incorporated other retailers such as Apple,
Wal-Mart, and PartStore.com.[5]
History
Dayton's
The company's roots were founded when George Dayton founded Dayton's
department store in Minneapolis, Minnesota. In 1902, George Dayton
constructed a six-story building in downtown Minneapolis and convinced R.S.
Goodfellow Company to move its Goodfellows department store into it. The
store's owner, Reuben Simon Goodfellow, retired and sold his interest in the
store to George Dayton.[6] In 1903, the store changed its name to the Dayton
Dry Goods Company, and it changed its name again to the Dayton Company in
1910. In the 1950s, it acquired the Portland, Oregon-based Lipmans
department store company and operated it as a separate division.[7] In 1956,
the Dayton Company opened Southdale, the world's first fully-enclosed
two-level shopping center in Edina, Minnesota, a suburb of Minneapolis.[8]
The Dayton Company also became a retail chain by opening its second Dayton's
store in Southdale.
The founding of Target
In 1962, the Dayton Company, using a concept developed by John F. Geisse,
entered discount merchandising by opening its first Target discount store in
Roseville, Minnesota, a suburb north of Saint Paul. The name "Target"
originated from Dayton's publicity director, Stewart K. Widdess, and was
intended to prevent consumers from associating the new discount store chain
with the department store. The new subsidiary, Target Stores, ended its
first year with four units, all in the Minneapolis area. Target Stores lost
money in its initial years; however, in 1965 it reported its first gain with
sales reaching $39 million, allowing a fifth store to open in Minneapolis.
In 1966, Bruce Dayton launched the B. Dalton Bookseller specialty chain,
which became the largest hardcover bookseller in the United States.[6] The
bookseller chain was named after the founder, but with the y in Dayton
replaced with an l. Target Stores expanded outside of Minneapolis by opening
two stores in Denver, Colorado, and sales exceeded $60 million. In 1967, the
Dayton Corporation was established and it went public with its first
offering of common stock, and it opened two more Target stores in Minnesota
resulting in a total of nine units.[9]
In 1968, Target changed its bullseye logo to the one currently in use, and
expanded into St. Louis, Missouri, with two new units. That year, Target
Stores experienced a transition phase: Target's president and co-founder,
Douglas J. Dayton, went back to the parent Dayton Corporation and was
succeeded by William A. Hodder, and senior vice president and cofounder John
Geisse left the company. He was later hired by St. Louis-based May
Department Stores, where he founded the Venture Stores chain.[9] Target
Stores ended the year with 11 units and $130 million in sales. In 1969, it
acquired the Lechmere electronics and appliances chain that operated in New
England, and expanded Target Stores into Texas and Oklahoma with six new
units and its first distribution center in Fridley, Minnesota.[10] The
Dayton Company also merged with the Detroit-based J.L. Hudson company that
year, to become the Dayton-Hudson Corporation consisting of Target and five
major department store chains: Dayton's, Diamonds of Phoenix, Arizona,
Hudson's, John A. Brown of Oklahoma City, Oklahoma, and Lipmans. In 1970,
Target Stores added seven new units, including two units in Wisconsin, and
the 24-unit chain reached $200 million USD in sales.[9] That year,
Dayton-Hudson also acquired the Team Electronics specialty chain that was
headed by Stephen L. Pistner.[11]
Turnaround
In 1971, it acquired sixteen stores from the Arlan's department store chain
in Colorado, Iowa, and Oklahoma. That year, two of those units reopened as
Target stores, and in 1972 the other fourteen were reopened to make a total
of 46 units. This caused the chain to experience another major transition
phase: It reported its first decrease in profits since its initial years, as
a result of the chain's rapid expansion and the top executives' lack of
experience in discount retailing. Its loss in operational revenue was due to
overstocking and carrying goods over multiple years regardless of inventory
and storage costs. By then, Dayton Hudson considered selling off the Target
Stores subsidiary. In 1973, Stephen Pistner, who had already revived Team
Electronics and would later revive Montgomery Ward and Ames, was named chief
executive officer of Target Stores, and Kenneth A. Macke was named Target
Stores's senior vice president. The new management saved the chain by
marking down merchandise to clean out its overstock and by allowing only one
new unit to open that year. In 1975, it opened two stores, reaching 49 units
in nine states and $511 million in sales. That year, the Target discount
chain became the company's top revenue producer.[9]
In 1976, Target opened four new units and reached $600 million in sales.
That year, Kenneth Macke was promoted to president and chief executive
officer of Target Stores. In 1977, Target Stores opened seven new units, and
Stephen Pistner became president of Dayton Hudson, with Kenneth Macke
succeeding him as chairman and chief executive officer of Target Stores. The
senior vice president of Dayton Hudson, Bruce G. Allbright, moved to Target
Stores and succeeded Kenneth Macke as president. In 1978, the company
acquired Mervyns and became the 7th largest retailer in the United States.
Target Stores opened eight new stores that year, including its first
shopping mall anchor store in Grand Forks, North Dakota. In 1979, it opened
13 new units to a total of 80 Target stores in eleven states and $1.12
billion in sales.[9][13] In 1980, it sold its Lipmans department store chain
of six units to Marshall Field's, which rebranded the stores as Frederick &
Nelson.[7] That year, Target Stores opened seventeen new units, including
expansions into Tennessee and Kansas. It also acquired the Ayr-Way discount
retail chain of 40 stores and one distribution center from
Indianapolis-based L.S. Ayres & Company, which it reopened in 1981 as Target
stores. That year, Stephen Pistner left the parent company to join
Montgomery Ward, and Kenneth Macke succeeded him as president of Dayton
Hudson.[14] Floyd Hall succeeded Kenneth Macke as chairman and chief
executive officer of Target Stores. Bruce Allbright left the company to work
for Woolworth, where he was named chairman and chief executive officer of
Woolco. Bob Ulrich also became president and chief executive officer of
Diamond's Department Stores in 1981.[15] In addition to the Ayr-Way
acquisition, Target Stores expanded by opening fourteen new units and a
third distribution center in Little Rock, Arkansas, to a total of 151 units
and $2.05 billion in sales.[9]
West and east coast expansion
Since the launch of Target Stores to this point, it had focused its
expansion in the Central United States. In 1982, it expanded into the West
Coast of the United States by acquiring 33 FedMart stores in Arizona,
California, and Texas and opening a fourth distribution center in Los
Angeles.[16] That year, Bruce Allbright returned to Target Stores as its
vice chairman and chief administrative officer, and the chain expanded to
167 units and $2.41 billion in sales. The 33 units acquired from FedMart
were reopened as Target stores in 1983. Also in 1983, it founded the Plums
off-price apparel specialty store chain with four units in the Los Angeles
area, with an intended audience of middle-to-upper income women.
In 1984, it sold its Plums chain to Ross Stores after only 11 months of
operation, and it sold its Diamond's and John A. Brown department store
chains to Dillard's.[17][18][19] Meanwhile, Target Stores added nine new
units to a total of 215 stores and $3.55 billion in sales. Floyd Hall left
the company and Bruce Allbright succeeded him as chairman and chief
executive officer of Target Stores. In May 1984, Bob Ulrich became president
of the Dayton Hudson Department Store Division, and in December 1984 became
president of Target Stores.[15]
In late 1986, the company acquired 50 Gemco stores from Lucky Stores in
California, allowing Target Stores to become the dominant retailer in
Southern California as the chain grew to a total of 246 units. It also
opened a fifth distribution center in Pueblo, Colorado. Dayton-Hudson sold
the B. Dalton Bookseller chain of several hundred units to Barnes &
Noble.[6] In 1987, the acquired Gemco units reopened as Target units, and
Target Stores expanded into Michigan and Nevada, including six new units in
Detroit, Michigan, to compete directly against Detroit-based Kmart, leading
to a total of 317 units in 24 states and $5.3 billion in sales. Bruce
Allbright became president of Dayton Hudson, and Bob Ulrich succeeded him as
chairman and chief executive officer of Target Stores.[15] In 1988, Target
Stores expanded into the Northwestern United States by opening eight units
in Washington and three in Oregon, to a total of 341 units in 27 states. It
also opened a distribution center in Sacramento, California, and replaced
the existing distribution center in Indianapolis, Indiana, from the Ayr-Way
acquisition with a new one.[9]
In 1989, it expanded by 60 units, especially in the Southeastern United
States where it entered Florida, Georgia, North Carolina, and South Carolina
to a total of 399 units in 30 states with $7.51 billion in sales.[9] This
included an acquisition of 31 more stores from Federated Department Stores'
Gold Circle and Richway chains in Florida, Georgia, and North Carolina,
which were later reopened as Target stores.[16] It also sold its Lechmere
chain that year to a group of investors including Berkshire Partners, a
leveraged buy-out firm based in Boston, Massachusetts, eight Lechmere
executives, and two local shopping mall executives.[10]
In 1990, it acquired Marshall Field's from BATUS Inc. and Target Stores
opened its first Target Greatland general merchandise superstore in Apple
Valley, Minnesota. In 1991, Target Stores had opened 43 Target Greatland
units, and sales reached $9.01 billion. In 1992, it created a short-lived
chain of apparel specialty stores called Everyday Hero with two stores in
Minneapolis.[16] They attempted to compete against other apparel specialty
stores such as GAP by offering private label apparel such as its Merona
brand. In 1994, Kenneth Macke left the company, and Bob Ulrich succeeded him
as the new chairman of Dayton-Hudson.[11]
In [1995, Target Stores opened its first SuperTarget hypermarket in Omaha,
Nebraska. Its store count increased to 670 with $15.7 billion in sales, and
in 1996 to 736 units with $17.8 billion in sales.[20] In 1997, both of the
Everyday Hero stores were closed.[21] Target's store count rose to 796
units, and sales rose to $20.2 billion.[20] In 1998, it acquired Greenspring
Company's multi-catalog direct marketing unit, the Rivertown Trading
Company, from Minnesota Communications Group, and it acquired the Associated
Merchandising Corporation, an apparel supplier.[22][23] Target Stores grew
to 851 units and $23.0 billion in sales.[20] In 1999, it acquired Fedco and
its ten stores in a move to expand its SuperTarget operation into Southern
California. It reopened six of these stores under the Target brand and sold
the other four locations to Wal-Mart, Home Depot, and the Ontario Police
Department, and its store count rose to 912 units in 44 states with sales
reaching $26.0 billion.[24][13][20] On September 7, 1999, it relaunched its
Target.com website as an e-commerce site and as part of its discount retail
division. The site initially offered merchandise that differentiated its
stores from its competitors, such as its Michael Graves brand.[25]
Target Corporation
In January 2000, Dayton Hudson Corporation changed its name to Target
Corporation and its ticker symbol to TGT; by then, between 75 percent and 80
percent of the corporation's total sales and earnings came from Target
Stores while the other four chains—Dayton's, Hudson's, Marshall Field's, and
Mervyns—were used to fuel the growth of the discount chain, which expanded
to 977 stores in 46 states and sales reached $29.7 billion by the end of the
year.[13] It also separated its e-commerce operations from its retailing
division, and combined it with its Rivertown Trading unit into a stand-alone
subsidiary called target.direct.[26] In 2001, it announced that its Dayton's
and Hudson's stores would operate under the Marshall Field's brand, which
was the most recognizable name in the Department Stores Division. Target
Stores expanded into Maine, reaching 1053 units in 47 states and $33.0
billion in sales.[20][27] In 2002, it expanded to 1147 units and sales
reached $37.4 billion, and in 2003 it reached 1225 units and $42.0 billion
in sales.[13]
On March 10, 2004, Target Corporation announced it had hired Goldman Sachs
Group to analyze options for selling its Marshall Field's and Mervyns chains
of department stores. Three months later, on June 9, 2004, Target
Corporation announced its sale of the Marshall Field's chain and several
Mervyns stores to St. Louis, Missouri-based May Department Stores Company,
which became effective July 31, 2004. On July 21, 2004, it announced the
sale of Mervyns to an investment consortium including Sun Capital Partners,
Inc., Cerberus Capital Management, L.P., Lubert-Adler/ Klaff and Partners,
L.P., which was finalized September 2. Target Stores expanded to 1308 units
and reached $46.8 billion USD in sales. In 2005, it reached 1397 units and
$52.6 billion in sales, and in 2006 it expanded to 1488 units and sales
reached $59.4 billion.[13][2]
Subsidiaries
Today, Target Corporation has its headquarters on Nicollet Mall in
Minneapolis, near the site of the original Goodfellows store. It operates
its main retail subsidiary, Target Stores, under the banner of 'Target'. The
company owns several other subsidiaries, which include:
* Target Financial Services (TFS): issues Target's credit cards, known as
the Target REDcard, consisting of the Target VISA and the Target Card
(formerly the Target Guest Card), issued through Target National Bank
(formerly Retailers National Bank) for consumers and through Target Bank for
businesses. Target Financial Services also oversees GiftCard balances (see
GiftCards section below).
* Target Sourcing Services/The Associated Merchandising Corporation (TSS/AMC):
This global sourcing organization locates merchandise from around the world
for Target and helps import the merchandise to the United States. Such
merchandise include garments, furniture, bedding, and towels. TSS/AMC has 27
full-service offices, 48 quality-control offices, and seven commissionaires
located throughout the world. TSS/AMC employs 1,200 people. Its engineers
are responsible for evaluating the factories that do business with Target
Corporation for quality, as well as labor rights and transshipment
issues.[29] It was acquired by Target Corporation in 1998, and was founded
in 1916, previously owned by the clients it served.[30] It also acts as a
buying office for Saks Incorporated, Bloomingdale's, Stage Stores Inc., TJ
Maxx, and Marshalls.[23] The Target Sourcing Services division locates
merchandise exclusively for Target Stores and Target.com.
* Target Commercial Interiors: provides design-services and furniture for
office space. Currently, Target Commercial Interiors has an unusually high
market share of Fortune 500/1000 business customers, and are expanding to
attract small to medium sized businesses, as well as home offices. This
subsidiary has six showrooms in Illinois, Minnesota, and Wisconsin,
including a first-of-its-kind retail concept store and showroom in
Bloomington, Minnesota that opened on June 23, 2005.
* Target Brands: owns and oversees the company's private label products,
including the grocery brands Archer Farms and Market Pantry, Sutton & Dodge,
their premium meat line, and the electronics brand Trutech. In addition,
Bullseye Dog is a trademark, and the Bullseye Design and 'Target' are
registered trademarks of Target Brands.
* Target.com: owns and oversees the company's e-commerce initiatives, such
as the Target.com domain. Founded in early 2000 as target.direct, it was
formed by separating the company's existing e-commerce operations from its
retailing division, and combining it with its Rivertown Trading direct
marketing unit into a stand-alone subsidiary.[26] In 2002, target.direct and
Amazon.com's subsidiary Amazon Enterprise Solutions created a partnership
where Amazon.com would provide order fulfilment and guest services for
Target.com in exchange for fixed and variable fees. This electronic commerce
relationship between target.direct and Amazon Enterprise Solutions will last
until August 2010.[31][32] After the company sold Marshall Field's and
Mervyns in 2004, target.direct became Target.com.
Target Stores
Target Corporation's main retailing subsidiary, Target Stores, is a United
States discount retail chain consisting of 1,502 stores (as of January 4,
2007).[1][13] It has units in all states except for Alaska, Hawaii, and
Vermont, operating under the mastheads of Target, Target Greatland, and
SuperTarget. The chain was founded by Douglas J. Dayton and John Geisse, and
the first Target store "T-1" opened on May 1, 1962 in Roseville,
Minnesota.[9] That store was closed and demolished on January 8, 2005, to
make room for a SuperTarget, which opened on October 9 of the same year.[33]
Target Corporation has aggressive plans to have 2,000 stores open by the
year 2010,[34] including expanding to Alaska and Hawaii.[35][36]
Target's retail operations are limited to the United States. Aside from the
leased name and logo, the Australian retail chain of the same name is not
related to Target Corporation.
Target
Target is a chain of discount department stores that are about 95,000 to
135,000 square feet (12,000 m²) and carry hardlines ("regular" products and
goods), softlines (clothing), and a limited amount of groceries, usually
non-perishable. Specifically, Target stores carry clothing, shoes, jewelry,
health and beauty products, electronics, compact discs, DVDs, bedding,
kitchen supplies, sporting goods, toys, pet supplies, automotive supplies,
hardware supplies, and food. They also carry seasonal merchandise such as
patio furniture during the summer and Christmas decorations during November
and December. Many stores may also have one-hour photo processing, a
portrait studio, an optical store, a pharmacy, and a garden center. Stores
opened and re-modeled in 2004 or later also include the expanded snack bar
that is featured in Target Greatland locations. These generally include a
Starbucks Coffee shop, a Pizza Hut Express, and a Taco Bell Express in
addition to Target's Food Avenue. It has also been reported that Cold Stone
Creamery and Target have signed a deal to test in-store ice cream shops in
four stores.[37]
The first few Target stores included leased supermarkets in addition to
general merchandise, which during the time was a common practice by discount
retailers as they attempted to offer a one-stop shopping experience to
customers. Douglas Dayton stated in 1967 that "we believe that the
discount-grocery store is a necessary ingredient in what we offer the
customer. After all, food sales are about 40% of all department store-type
merchandise sales, so the two kinds of stores go hand-in-hand and are what
people think of when they think of a discount store." However, by the end of
the decade, Target started moving away from this general merchandise and
leased supermarket practice. In 1969, Target opened its first store
consisting of only general merchandise.[16]
In the past, the one-hour photo processing labs were not owned by Target,
but by Qualex, a subsidiary of Eastman Kodak and were staffed by employees
of Qualex, not Target. However, in June 2005, Target spokeswoman Brie Heath
announced that Target Corporation will replace the Qualex photo labs with
their own labs running Kodak equipment, and will staff them with Target
employees. Unlike the previous Qualex labs, all photo processing is done "in
house", including next-day, digital, and Kodak Perfect Touch processing,
although a few labs have been replaced with "send-out" only service with a
self-service Kodak Picture Maker kiosk. A select number of "test" stores are
running with Fujifilm equipment instead of Kodak.[38] Target has also
partnered with Yahoo! Photos for online photo services, including ordering
prints online for one-hour store pickup.
Target Greatland
Target Greatland is a chain of general merchandise superstores that are
about 150,000 square feet (14,000 m²). They carry a larger selection of
general merchandise than a basic Target store; however, they do not have a
full-line of groceries like meat, bakery, deli, produce and dairy.
Throughout 2005, the company reorganized the sales floor, allowing them to
double the grocery space they had before. Prominent features include double
entrances on single level stores along with an expanded snack bar. The snack
bar may include a Pizza Hut Express, Taco Bell Express, and/or a Starbucks.
The construction of new Target Greatland stores have been phased out in
favor of building SuperTarget prototypes or regular Target prototypes with
more square footage.
The first Target Greatland opened in Apple Valley, Minnesota, in 1990, and
has since been remodeled and expanded, becoming a SuperTarget. A Target
Greatland in Columbus, OH opened just a block away from a Wal-Mart in 1997 A
Target Greatland opened in Green Bay, WI on July 29, 2001, just 2 blocks
from the headquarters of another Midwest retailer, ShopKo. The last Target
Greatland opened in 2006 and is located in Staten Island, New York City.
SuperTarget
SuperTarget is a chain of hypermarkets that are about 175,000 square ft.
(16,000 m²). Like Target Greatland, SuperTarget features double entrances on
one story stores; some also have between the double entrances a merchandise
loading lane as a prominent feature of the building. The store logo often
spells "Super" in green cursive, but recently, newer ones are signed in red
block letters in the Helvetica font that the word "Target" uses.[12] They
carry everything a Target or a Target Greatland does as well as a grocery
store. Many SuperTargets may also feature a Starbucks Coffee shop, a Pizza
Hut Express, a Taco Bell Express,(which is currently being phased out at
SuperTarget locations) Jamba Juice, a pharmacy, a portrait studio, a
one-hour photo processing lab, an optical store, or a Wells Fargo Bank.
Unlike many other hypermarkets in the United States (such as Wal-Mart
Supercenters and Meijer), SuperTargets are not continuously open.
In the past, some SuperTargets featured an E*TRADE trading station instead
of a Wells Fargo Bank. However, in June 2003, E*TRADE decided to remove all
E*TRADE branches from their SuperTarget locations[39] without advance
notice. This sudden move was not initiated by Target Corporation. Mitchell
Caplan, E*TRADE's CEO, said that "We were not able to make it into a
profitable distribution channel...[w]e're better off exiting." E*TRADE also
sent a letter of notification to their customers informing them about this
change.
The first SuperTarget opened in Omaha, Nebraska in 1995, and the second
SuperTarget opened in Lawrence, Kansas, later that same year.[40] As of
January 4, 2007, Target operated 182 SuperTarget stores in 21 U.S.
states.[1][13]
Urban stores
While many Target stores share a fairly common big-box store layout, the
company has been known to be flexible with its designs. Target operates
unique stores across the country in urban locations or within a mall where a
standard one story building would not be feasible. These stores encompass
multiple floors with both sales floor area and off stage areas such as
offices or storage rooms spanning a number of these floors. Vertical
transportation is provided in the store by escalator, elevator, or Vermaport,
a specialized escalator for carts. Target currently operates 34 multi-level
stores.
Target has used their urban store concept to open multiple story stores in
city centers such as West Hollywood, California, Brooklyn, New York City, or
Minneapolis, within the corporation's headquarters complex. Building stores
in these environments carries an elevated cost which is offset by the high
potential for business that these stores can bring in. The Target store
located on Nicollet Mall in Minneapolis features a three-story glass
entrance and a design that sets it apart from suburban Target stores. This
urban store alone cost Target Corporation 16.3 million USD.[41] This concept
has also been used to convert Target stores from former Montgomery Ward and
Younkers stores.[42]
Distribution centers
As of January 4, 2007, Target Corporation operated 25 distribution centers
across the United States.[1] Target opened two new distribution centers in
2006 (Rialto, California and DeKalb, Illinois) to support the growth of its
stores. With the exception of vendor supplied items, such as greeting cards
and soda, these distribution centers ship items directly to Target stores.
Also, unlike Wal-Mart, Target's grocery selection does not come from their
own distribution centers, but from the companies that Target has partnered
up with. For example, the produce carried in SuperTargets comes from
Supervalu distribution centers, except in Colorado, which are serviced
through FreshPack Produce Inc., of Denver Colorado.[6]
The retail chain's first distribution center opened in Fridley, Minnesota,
in 1969. It included a computerized distribution system and was known as the
Northern Distribution Center. During this time, the chain consisted of
seventeen stores after having expanded into Oklahoma and Texas.[9]
On August 9, 2004, Target announced to their suppliers that they were going
to perform a trial on the effects of radio frequency identification on the
efficiency of supply chain management in the Dallas/Fort Worth Metroplex.
This trial involved one Target distribution center and ten nearby Target
stores. Here, RFID tags would be placed on the bar codes of pallets and
cartons to track the goods from the suppliers to the distribution center,
and from the distribution center to the stores.[43]
Differentiation
Target Corporation competes directly against other discount retailers,
mainly Wal-Mart and Kmart. Since its founding in 1962, it has intended to
differentiate its stores from its competitors by offering what it believes
is more upscale, trend-forward merchandise at low cost, as opposed to the
traditional concept of focusing on low-priced goods. Douglas J. Dayton, one
of the Dayton brothers, explained John Geisse's concept:
“ "We will offer high-quality merchandise at low margins, because we are
cutting expenses. We would much rather do this than trumpet dramatic price
cuts on cheap merchandise."[9] ”
As a result, Target stores tend to attract younger and more educated and
affluent customers than its competitors. Currently, the median Target
shopper is 41 years old, which is the youngest of all major discount
retailers that Target competes directly against. The median household income
of Target's customer base is roughly $58,000 USD. Roughly eighty percent of
Target customers are female, and about 43 percent have children at home.
About eighty percent have attended college and 43 percent have completed
college.[1][13]
Target refers to itself as a "discount department store" instead of just a
discount store.[citation needed] Target stores do not play ambient music,
commonly known as elevator music and often distributed by Muzak. However,
several Target stores feature a Starbucks, and those do play music - but
only in the Starbucks centers. It also does not promote items or services
through its public address system. Target designs its stores to be more
attractive than Wal-Mart by having wider aisles, drop ceilings, a more
attractive presentation of merchandise and generally cleaner fixtures. In
addition, special attention is given to the design of the store environment:
graphics reinforce Target's advertising imagery and shelves are dressed with
contemporary signage, backdrops and liners, often printed on inexpensive
material such as paper, corrugated and foam boards. Some stores—particularly
those around international airports—have a bullseye painted on the roof that
can be seen from above: The Rosemont, Illinois, Target store next to O'Hare
International Airport is one such unit that has a bullseye painted on its
roof.[44]
Some of Target's fans jokingly refer to a Target store as "Tar-zhay" or
Targé (Tar-jé) (IPA: [tɑɹˈʒeɪ]), as though it were a French word, a
reference to its more upscale image compared to its competitors. This trend
is incorrectly believed to have been started by Oprah Winfrey, when she used
the French pronunciation to refer to the store on her television show. The
pronunciation has been traced back to 1962, the year the first Target store
opened. This pronunciation has also led some people to incorrectly believe
that the company is French-owned.[6]
Target calls its customers "guests", its employees "team members", and its
supervisors "team leaders". It derived this practice in 1989 from The Walt
Disney Company.[6]
Target stores do not sell firearms. In the early 1990s, they stopped selling
toy guns that looked realistic and limited its toy gun selection to ones
that were brightly colored and oddly shaped. They do not sell tobacco
products and have not sold cigarettes since 1996.[45] Unlike Wal-Mart, they
sell "explicit" CDs and "racy" magazines such as Maxim and FHM.
Target has many exclusive deals with various designers, including Isaac
Mizrahi, Michael Graves, Mossimo Giannulli, Fiorucci, and Liz Lange, among
others. To further increase their fashion profile, Target also created its
fashion-forward GO International line, which hires famous designers to
design collections available only for a few months. Target, after hiring
architect Michael Graves to design the scaffolding used to renovate the
Washington Monument and contributing $6 million USD to the restoration plan,
introduced its first designer line of products in 1999, the Michael Graves
Collection of housewares and home decor products.[46] Wal-Mart and Kmart
have followed Target's lead by signing exclusive designers to their stores
as well. Target also partners with well-established national brands to
create exclusive collections for its stores. Recently, Sony created a line
of electronics under the Sony LIV name geared towards women. The collection
included a CD player that resembled a purse, and a CD player that was
equipped to be mounted under the kitchen counter. Another example of this is
Target having an exclusive deal with Food Network for selling DVDs of TV
shows featuring popular chefs such as Rachael Ray, Alton Brown, and Paula
Deen. In July 2006, Target started selling two-tone pink edition Apple iPods
through a partnership with Colorware. Sometimes manufacturers will create
red-colored items, exclusively for Target. In 2002, Nintendo produced a red
special edition variant of the Game Boy Advance, which featured the Target
logo above the screen.[47]
GiftCards
The Target GiftCard is the retailing division's stored-value card or gift
card. Target sells more gift cards than any other retailer in the United
States. The unique designs of their cards contribute to their higher sales.
Past and current designs include lenticular, "scratch and sniff" (such as
peppermint during the Christmas season), glow in the dark, LED light-up, a
gift card on the side of a bubble blower, a gift card that can function as a
CD-ROM, and even a giftcard that allows the sender to record a voice
message. A current environmentally friendly giftcard is made from bioplastic
manufactured from corn.[48] Target rolled out a new MP3 Player giftcard for
the 2006 holiday season. It holds 12 songs and must be purchased with an
initial value of at least $50.
Many of these design ideas are not used by any other retailer in the United
States. It is noted that some of these unique design ideas are patented, and
these patents are assigned to the Target Brands subsidiary. For example,
some such Target GiftCard designs feature a wooden front side. On May 24,
2005, the United States Patent and Trademark Office granted US patent
D505,450 for the "ornamental design for a credit or stored value card with
wood layer" to inventors Amy L. Lauer and John D. Mayhew.[49] US patent
7004398, for the "stored-value card assembly including a stored-value card,
an edible product, and a wrapper", was granted to Michael R. Francis and
Barry C. Brooks on February 28, 2006.[50] Both of these patents have been
assigned to Target Brands, Inc.
ClearRx
In 2005, Target introduced a major revision of prescription bottles, which
it calls the ClearRx system. The redesigned bottles are color coded,
flattened-out and turned upside down providing more room for the label. This
system was based on the patent[51] by student Deborah Adler and was named
one of Time Magazine's Most Amazing Inventions of 2005.[52]
Philanthropy
Target Corporation is consistently ranked as one of the most philanthropic
companies in the country. According to a November 2005 Forbes article, it
ranked as the highest cash-giving company in America in percentage of income
given (2.1%).[53] Target donates around 5 percent of its pre-tax operating
profit; it gives over $3 million a week (up from $2 million in years prior)
to the communities in which it operates. It also gives a percentage of
charges from its Target Visa to schools designated by the cardholders. To
date, Target has given over $150 million to schools across the United States
through this program. Target's corporate by-laws state it must give 5
percent of its pre-tax profits to charity.[citation needed]
Further evidence of Target's philanthropy can be found in the Target House
complex in Memphis, Tennessee, a long-term housing solution for families of
patients at the city's St. Jude Children's Research Hospital. The
corporation led the way with more than $27 million in donations, which made
available 96 fully furnished apartments for families needing to stay at St.
Jude over 90 days.
Target has a standard no-solicitation rule at its properties, as it seeks to
provide a "distraction-free shopping experience for its guests." Exemptions
to this policy were previously made for the Salvation Army red kettles and
bell-ringers outside Target stores during the holidays through Christmas. In
2004, however, Target asked the organization to explore alternate methods to
partner with Target. Target donates to local Salvation Army chapters through
its grant program and annually to the United Way of America (the Salvation
Army is a member of the United Way coalition).
In 2005, Target and the Salvation Army[54] created a joint effort called
"The Target/Salvation Army Wish List," where online shoppers could donate
goods to the organization for Hurricane victims by buying them directly from
Target.com between November 25, 2005, and January 25, 2006. In 2006, they
created another joint effort called "The Target/Salvation Army Angel Giving
Tree,"[55] which is an online version of the Salvation Army's Angel Tree
program;[56] in addition to donating proceeds made from the sales of limited
edition Harvey Lewis angel ornaments within Target's stores. During the
Thanksgiving holiday of 2006, Target and the Salvation Army partnered with
magician David Blaine to send several families on a shopping spree the
morning of Black Friday. The challenge held that if Blaine could
successfully work his way out of a spinning gyroscope by the morning of
Black Friday, then several families would receive $500 shopping
certificates. The challenge was completed successfully by Blaine.[citation
needed]
During disasters, Target has been a major benefactor for relief efforts.
Target provided monetary and product donations during the September 11th
terrorist attacks on the U.S.; it also donated money for relief efforts for
the 2004 tsunami in South Asia. Most recently, Target donated $1.5 million
(U.S.) to the American Red Cross in the aftermath of Hurricane Katrina in
2005. It also allowed its store properties in the affected area to be used
as command centers for relief organizations. It also donated supplies such
as water and bug spray. Besides these major disasters, Target also regularly
lends support to disasters that are not as well known or only affect a
regional area.
Target Forensic Services
In 2006, The Washington Post revealed that Target is operating two
sophisticated criminal forensics laboratories, one at their headquarters,
the other in Las Vegas, NV.[57] Originally, the lab was created as an
internal need for the company to investigate instances of theft and fraud
and other criminal actions that have occurred on its own properties.
Eventually, the company began offering pro bono services to law enforcement
agencies across the country. Target's Forensic Services has assisted
agencies at all levels of government, including Federal agencies such as the
United States Secret Service, Bureau of Alcohol, Tobacco and Firearms and
the Federal Bureau of Investigation. The labs have become such a popular
resource for law enforcement that Target has had to restrict the cases it
assists in to only violent felonies.[58][59]
Criticism
Like many other large businesses and corporations, Target faces criticism.
But because of Target's smaller size in comparison to Wal-Mart, Target often
escapes the headlines that Wal-Mart's critics generate. Also, many may
overlook Target's alleged shortcomings because of its charitable generosity.
Practices that cause some concern include lack of a living wage
certification, lack of labor unions, and Target's contribution to urban
sprawl.[60]
In 2002, the company was alerted to sporting caps and shorts having the
number "88" embroidered on them. This number has been used by known white
supremacist groups as slang for "Heil Hitler." A customer informed the
company of the offensive merchandise. Target did not make a public apology
until the Southern Poverty Law Center echoed its concern. Target pulled the
merchandise from its stores and issued a public apology.[61]
In 2004, the company's decision to bar the Salvation Army from soliciting
donations at its stores generated much negative publicity (see Philanthropy
section above).
In 2005, Planned Parenthood protested Target policy involving a conscience
clause that allows pharmacists to refuse to dispense the emergency
contraceptive, Plan B Levonorgestrel, based on religious beliefs as long as
the employee ensures that the prescription is filled by another pharmacist
in a timely manner. Defenders of Target applaud the company for upholding
the employee's freedom of conscience, while critics feel this policy fails
to uphold the pharmacist's duty of care.[62]
In November 2005, the American Family Association criticized Target and
other retailers for not using the word "Christmas" in its holiday
advertising. Target responded by introducing words like "Christmas" and "Hannukah"
on its website and in-store signage, and by showing holiday ads that
included the phrase "Merry Christmas".[63][64]
In 2007, Chris Serres (a staff writer at the Star Tribune) found that Target
employees wearing the hijab scarf at the location on East Lake Street in
Minneapolis refused to touch pork products. This was a journalistic
investigation based on reports from other sources.[65]
Diversity
Target defines diversity as individuality. The company state this
individuality may include a wide spectrum of attributes such as personal
style, age, race, gender, ethnicity, sexual orientation, language, physical
ability, religion, family, citizenship status, socio-economic circumstances,
education and life experiences.[66]
The Target employee diversity program is called "The Strength of Many. The
Power of One".[67] It specifically seeks to work with vendors and
contractors that are owned by minorities or women.[68]
It has long extended domestic-partner benefits to straight, gay, and lesbian
employees. It has received an 86 on the Human Rights Campaign Corporate
Equality Index Score.[69] In addition, Target Corporation was named one of
the "100 Best Companies for Working Mothers" in 2004 by Working Mother.
Despite Target's stated commitment to diversity, the National Association
for the Advancement of Colored People has repeatedly given Target failing
grades on its annual Economic Reciprocity Initiative report card, a measure
of the company's "commitment to the African-American citizenry". In 2003 and
2005, the NAACP has rated Target an "F" on this report; in 2004, Target was
rated a "D-".[70][71][72] In 2006, when Target was asked why it didn't
participate in the survey again,[73] a representative explained, "Target
views diversity as being inclusive of all people from all different
backgrounds, not just one group."[74]
Major sponsorships
Target owns the naming rights to the Target Center in Minneapolis. It also
sponsors the NASCAR and IndyCar racing teams of Chip Ganassi Racing. In the
2005 NASCAR season, the #41 Chip Ganassi Target car was driven by Casey
Mears; for the 2006 season, rookie Reed Sorenson took over the #41 when
Mears moved to a different Chip Ganassi car on the same team.
Target Corporation is also a major sponsor of the annual Minneapolis
Aquatennial, where it hosts the Target Fireworks Show. It is the largest
annual fireworks show west of the Mississippi River, and the fourth largest
annual fireworks show in the United States.[75]
Target also sponsors the Museum of Modern Art in Manhattan, New York. It
hosts Target Free Friday Nights, providing to all visitors free admission to
the museum during Fridays after 4 p.m. A similar Target-sponsored program at
the Los Angeles County Museum of Art called "Free after Five" provides free
admission in the evening throughout the week. Tuesdays are free at the
Museum of Contemporary Art in Chicago, Illinois, courtesy of Target. In its
hometown of Minneapolis, Target sponsors the Target Free Thursday Nights at
the Walker Art Center, where admission is free after 4 p.m.
Target is the founding sponsor of the Weekend America radio program, and the
Oprah Winfrey Show on TV.
Target often supports major awards shows such as the Oscars, Emmys, Grammys,
and the Golden Globes.
Notes and references
1. ^ a b c d e Corporate Fact Card (PDF), Target Corporation, March 8, 2007.
2. ^ a b c Target Corporation Fourth Quarter Earnings Per Share $1.29,
Target Corporation, February 27, 2007.
3. ^ Top 100 Retailers: The Nation's Retail Power Players (PDF), Stores,
July 2006.
4. ^ ?
5. ^ PartStore.com Listed Among Internet Retailer's Top 500. Published by
Forbes, May 23, 2007. Accessed on June 25, 2007.
6. ^ a b c d e f Rowley, Laura (2003) On Target: How the World's Hottest
Retailer Hit a Bull's-eye John Wiley & Sons; Hoboken, New Jersey. ISBN
0-471-25067-8.
7. ^ a b Lipman Wolfe and Co., June 24, 2006.
8. ^ Dayton's and Southdale Stores, Rudder & Finn, October 7, 1956.
9. ^ a b c d e f g h i j k From Roseville to Greatland, Target still hits
the mark, Discount Store News, September 17, 1990.
10. ^ a b Lechmere, Inc. company history, FundingUniverse.com.
11. ^ a b Ulrich moving up at DH: speculation mounts about naming a
successor - Robert Ulrich becomes chairman of Dayton Hudson Corp, Discount
Store News, Richard Halverson, May 2, 1994.
12. ^ a b The Helvetica Hegemony, Slate, Mia Fineman, May 25, 2007.
13. ^ a b c d e f g h Fast Facts, Target Corporation, September 18, 2006.
14. ^ Calling It Quits, Time, John S. Demott, May 20, 1985.
15. ^ a b c Leadership paves the way to company strength, DSN Retailing
Today, April 10, 2006.
16. ^ a b c d 1962-1992 Dayton's dream is on Target, Discount Store News,
April 20, 1992.
17. ^ Plums fall doesn't cause too many shock waves, Discount Store News,
Sidney Rutberg, February, 1984.
18. ^ Dayton Hudson, sour on Plums, sells its 11-month-old off-pricer,
Discount Store News, March 19, 1984.
19. ^ Dayton-Hudson In Dillard Deal, The New York Times, August 10, 1984.
20. ^ a b c d e Target Corporation 2000 Annual Report, Target Corporation.
21. ^ Target closes Everyday Hero in Mall of America, Minneapolis/St. Paul
Business Journal, September 11, 1997.
22. ^ MPR parent sells Rivertown Trading Co. to Dayton Hudson, Minnesota
Public Radio, March 23, 1998.
23. ^ a b Associated Merchandising Corporation, The American Chamber of
Commerce in Thailand.
24. ^ Target buys Fedco for SuperT, Discount Store News, July 26, 1999.
25. ^ Target may step up NE rollouts; debuts long-awaited e-tail site,
Discount Store News, September 20, 1999.
26. ^ a b Target is the name, Discount Store News, February 21, 2000.
27. ^ Target Corporation 2001 Annual Report, Target Corporation.
28. ^ Target Lights create evolving Minneapolis landmark, Minneapolis/St.
Paul Business Journal, April 11, 2003.
29. ^ Vendor Compliance, Target Corporation.
30. ^ Target Sourcing Services/AMC History, Target Corporation.
31. ^ Target and Amazon.com Expand Online Target Store, The Write News,
August 21, 2002.
32. ^ Target Corporation and Amazon Enterprise Solutions Extend E-Commerce
Agreement to 2010, Target Corporation, July 18, 2006.
33. ^ Target to open two new SuperTargets in Twin Cities, Minneapolis/St.
Paul Business Journal, October 20, 2004.
34. ^ 2005 Annual Report (PDF), Target Corporation.
35. ^ Wasilla Target store no longer a rumor, The Mat-Su Valley
Frontiersman, Russell Stigall, March 30, 2007.
36. ^ Target plans expansion to Hawaii, Minneapolis/St. Paul Business
Journal, February 13, 2006.
37. ^ Cold Stone Creamery to Open Test Stores in Target, Chain Store Age,
May 5, 2006.
38. ^ BJ's closes photofinishing kiosks, Photo Marketing Newline, June 22,
2005.
39. ^ E-Trade closes trading stations, San Francisco Business Times, June 6,
2003.
40. ^ Target History Timeline (PDF), Target Corporation.
41. ^ Minneapolis Target store opens, but controversy doesn't end, Minnesota
Public Radio, October 9, 2001.
42. ^ On the Bull's Eye, Buildings Magazine, June 2003.
43. ^ Target Meets With Suppliers About RFID Plans, InformationWeek, August
10, 2004.
44. ^ Target on on roof top via Google Maps. Accessed January 2007.
45. ^ Corporate Responsibility Report (PDF), Target Corporation, January 31,
2006.
46. ^ Is Target making a Graves mistake?, Discount Store News, February 8,
1999.
47. ^ Target Gets Exclusive New GBA Color!, Nintendo World Report, Billy
Berghammer, November 25, 2002.
48. ^ Target's Bioplastic Gift Card, treehugger, January 31, 2006.
49. ^ US design patent D505,450 : Credit or stored value card with wood
layer, U.S. Patent & Trademark Office.
50. ^ U.S. Patent 7,004,398 : Stored-value card with edible product, U.S.
Patent & Trademark Office.
51. ^ US patent application 20030214129: Medication packaging and labeling
system, U.S. Patent & Trademark Office.
52. ^ Best Inventions 2005: Healthy Options, Time, November 21, 2005.
53. ^ The Most Charitable Companies, Forbes, November 14, 2005.
54. ^ Target and The Salvation Army Announce Partnership, The Salvation
Army, November 14, 2005.
55. ^ Target Launches Multi-Faceted Christmas Partnership With The Salvation
Army, The Salvation Army, November 14, 2006.
56. ^ Salvation Army Giving Tree, Target.com.
57. ^ Target Corporation Assets Protection (PDF), Office of the Arizona
Attorney General
58. ^ Retailer Target Branches Out Into Police Work, The Washington Post,
January 29, 2006.
59. ^ Target sets sights on hard-to-crack cases, CNN, February 9, 2006.
60. ^ Just call it 'Teflon' Target, CNN/Money, April 20, 2005.
61. ^ Target pulls '88' clothing from stores, Minneapolis/St. Paul Business
Journal, August 28, 2002.
62. ^ Birth-control battle at Target; Planned Parenthood and Target Corp.
dispute whose rights are more important: Customers who need emergency
contraception or pharmacists who think it's immoral to provide it. Star
Tribune. November 11, 2005.
63. ^ Merry Christmas Target, Snopes.com, December 9, 2005.
64. ^ Target 2006 TV commercial "Merry Christmas" 1, YouTube.com.
65. ^ [1]
66. ^ Diversity Statement, Target Corporation.
67. ^ Target Diversity Website, Target Corporation.
68. ^ Supplier Diversity: Minority and Women Business Development Program,
Target Corporation.
69. ^ Target Corp., The Human Rights Campaign.
70. ^ 2004 NAACP General Merchandising Industry Report Card (PDF), National
Association for the Advancement of Colored People.
71. ^ NAACP 2005 Industry Surveys Give Five Major Industries "C" and "D"
Grades, National Association for the Advancement of Colored People.
72. ^ 2005 NAACP General Merchandising Industry Report Card (PDF), National
Association for the Advancement of Colored People.
73. ^ 2006 General Merchandising Industry Report Card, National Association
for the Advancement of Colored People.
74. ^ NAACP Issues Corporate Report Cards, The Associated Press, July 18,
2006.
75. ^ Target Fireworks Show, 2007 Minneapolis Aquatennial.
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